Food Empire (SGX:F03) reported a record FY22 which blew past ours and consensus estimates. 4Q22 revenue grew 29% y-o-y while NPAT surged 22.6% y-o-y, driven by strong demand from Russia, CIS markets and India. Food Empire's dividend also doubled y-o-y to S$0.044.
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With a positive outlook and resilience despite the ongoing Russia-Ukraine conflict, we maintain BUY recommendation on Food Empire.
Record year – more to come
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We expect demand to remain strong in Russia and the CIS region and stronger growth from Vietnam as well as the expansion of its no-dairy creamer facility which is expected to begin commercial production by 4Q23.
In India, spray dry and new freeze dry coffee plants continue to operate at full capacity but should yield higher margins due to cost reductions on the back of freight cost normalisation.
We also expect the next two quarters to be much stronger y-o-y as the conflict started midway during 1Q22.
Dividends double + share buybacks to continue
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Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
